diff --git a/sbt-app/src/sbt-test/tests/nested-testquick/build.sbt b/sbt-app/src/sbt-test/tests/nested-testquick/build.sbt
new file mode 100644
index 000000000..ccae08441
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/nested-testquick/build.sbt
@@ -0,0 +1,11 @@
+Global / cacheStores := Seq.empty
+
+ThisBuild / scalaVersion := "2.12.21"
+
+lazy val root = (project in file("."))
+  .settings(
+    crossPaths := false,
+    autoScalaLibrary := false,
+    libraryDependencies += "com.github.sbt" % "junit-interface" % "0.13.2" % Test,
+    Test / parallelExecution := false,
+  )
diff --git a/sbt-app/src/sbt-test/tests/nested-testquick/changed/BadCalcTest.java b/sbt-app/src/sbt-test/tests/nested-testquick/changed/BadCalcTest.java
new file mode 100644
index 000000000..f63883526
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/nested-testquick/changed/BadCalcTest.java
@@ -0,0 +1,18 @@
+package com.example;
+
+import static org.junit.Assert.*;
+import org.junit.Test;
+
+public class BadCalcTest {
+  @Test
+  public void testBadAdd() {
+    assertEquals(99, Calc.add(1, 2));
+  }
+
+  public static class Nested {
+    @Test
+    public void testBadAddNegative() {
+      assertEquals(99, Calc.add(1, -2));
+    }
+  }
+}
diff --git a/sbt-app/src/sbt-test/tests/nested-testquick/changed/Calc.java b/sbt-app/src/sbt-test/tests/nested-testquick/changed/Calc.java
new file mode 100644
index 000000000..00490bc9f
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/nested-testquick/changed/Calc.java
@@ -0,0 +1,7 @@
+package com.example;
+
+public class Calc {
+  public static int add(int a, int b) {
+    return a * b;
+  }
+}
diff --git a/sbt-app/src/sbt-test/tests/nested-testquick/src/main/java/com/example/Calc.java b/sbt-app/src/sbt-test/tests/nested-testquick/src/main/java/com/example/Calc.java
new file mode 100644
index 000000000..626f094c8
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/nested-testquick/src/main/java/com/example/Calc.java
@@ -0,0 +1,7 @@
+package com.example;
+
+public class Calc {
+  public static int add(int a, int b) {
+    return a + b;
+  }
+}
diff --git a/sbt-app/src/sbt-test/tests/nested-testquick/src/test/java/com/example/CalcTest.java b/sbt-app/src/sbt-test/tests/nested-testquick/src/test/java/com/example/CalcTest.java
new file mode 100644
index 000000000..f53194d17
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/nested-testquick/src/test/java/com/example/CalcTest.java
@@ -0,0 +1,19 @@
+package com.example;
+
+import static org.junit.Assert.*;
+import org.junit.Test;
+
+public class CalcTest {
+  @Test
+  public void testAdd() {
+    assertEquals(3, Calc.add(1, 2));
+  }
+
+  public static class Nested {
+    @Test
+    public void testAddNegative() {
+      assertEquals(-1, Calc.add(1, -2));
+    }
+  }
+
+}
diff --git a/sbt-app/src/sbt-test/tests/nested-testquick/src/test/java/com/example/GoodCalcTest.java b/sbt-app/src/sbt-test/tests/nested-testquick/src/test/java/com/example/GoodCalcTest.java
new file mode 100644
index 000000000..8bb11dd01
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/nested-testquick/src/test/java/com/example/GoodCalcTest.java
@@ -0,0 +1,18 @@
+package com.example;
+
+import static org.junit.Assert.*;
+import org.junit.Test;
+
+public class GoodCalcTest {
+  @Test
+  public void testAddPositive() {
+    assertEquals(3, Calc.add(1, 2));
+  }
+
+  public static class Nested {
+    @Test
+    public void testAddZero() {
+      assertEquals(0, Calc.add(0, 0));
+    }
+  }
+}
diff --git a/sbt-app/src/sbt-test/tests/nested-testquick/test b/sbt-app/src/sbt-test/tests/nested-testquick/test
new file mode 100644
index 000000000..18074bbc3
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/nested-testquick/test
@@ -0,0 +1,24 @@
+# Verify that testQuick works with nested test classes.
+# Nested test classes use $ encoding (e.g. CalcTest$Nested)
+# and we need to verify that testQuick properly tracks them.
+
+# Run all tests -- should pass.
+> testOnly com.example.CalcTest com.example.GoodCalcTest
+
+# testQuick should be a no-op since all tests passed.
+> testQuick
+
+# Verify testOnly picks up a good test.
+> testOnly com.example.GoodCalcTest
+
+# Copy in BadCalcTest and verify it fails.
+$ copy-file changed/BadCalcTest.java src/test/java/com/example/BadCalcTest.java
+> compile
+-> testOnly com.example.BadCalcTest
+
+# Introduce a bug in Calc.java (add -> multiply).
+$ copy-file changed/Calc.java src/main/java/com/example/Calc.java
+> compile
+
+# testQuick should re-run and fail because the source changed.
+-> testQuick